INTERNAL AUDITS A Management Tool Mary Ellen Raub Director, Quality Management Systems Wyle Aerospace Group Lexington Park, MD 301-866-2122 Mary.raub@wylelabs.com

Internal Audits – A Management Tool Wyle Audit Structure Wyle Internal Audit Process Internal Audit Execution Internal Audit Reporting & Follow up

Internal Audits What is an audit? *From ANSI/ISO/ASQ Q9000-2000 Audit* – systematic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled. *From ANSI/ISO/ASQ Q9000-2000 Ref: PMBOK - Audits are listed 32 times

Internal Audits Audit Types First-Party or Internal Audits – conducted by, or on behalf of an organization itself for internal purposes and can form the basis for an organization’s self-declaration of conformity. Second-Party Audits - external audit conducted by parties having an interest in the organization, such as customers, or by other persons on their behalf. Third-Party Audits – external audit conducted by external independent organizations. Such organizations provide certification or registration of conformity with requirements .

Internal Audits What do audits measure? Compliance or Conformance Strict adherence to a set of rules. Fulfillment of a specified requirement (like ISO 9001-2000) Examples: Regulatory or high-risk. Adequacy and Effectiveness Measure adequacy of processes and effectiveness of implementation Continual improvement Ref: PMBOK 4.3.2 Develop Project Management Plan: Tools and Techniques ( support the audit of the products or components to verify conformance to requirements.)

Internal Audits Why do internal audits? Provide input for management decisions. Inform management of actual or potential risks. Identify opportunities for improvement Assess personnel training effectiveness & equipment capability. Provide visible management support. Verify compliance to regulations. Act as internal control process for the quality management system

Internal Audits What should be audited? PMBOK 8.2.2 Perform Quality Assurance: Tools and Techniques (.2 Quality Audits) 11.6.2 Risk Monitoring and Control: Tools and Techniques (.2 Risk Audits) 12.5.2 Contract Administration: Tools and Techniques (.3 Inspections & Audits) 12.6.2 Contract Closure: Tools and Techniques (.1 Procurement Audits) ISO 9001:2000 – Quality Management System described in the organization’s Quality Manual

Wyle Audit Structure

Wyle Audit Structure Internal Audit Schedule

Wyle Audit Structure Audit Teams Lead Auditor (1 per audit) 1 hour QMS Awareness Training 4 hour Internal Auditor Training 40 hour formal Lead Assessor Training Participate in 2 internal audits as a team member Be appointed by senior management Internal Auditor (1 or more per audit) Optional 2-day formal Internal Audit Training Observe 2 audits prior to participating

Wyle Internal Audit Process Defines the internal audit process. Lists responsibilities of participants. Defines auditor qualifications. Identifies the process for performing internal audits. Identifies related documents and quality records.

Wyle Internal Audit Process Lead Auditor Responsibilities Set up date, time & location of internal audit with manager. Develop audit agenda using Agenda Template. Modify and/or review existing Audit Guides. Review previous internal audit results. Conduct “Opening Meeting”. Record non-conformances and objective evidence. Ensure audit is conducted according to Wyle Process. Conduct “Closing Meeting”. Brief findings and proposed corrective action. Initiate corrective action in the Action Item database. Complete and distribute formal Audit Report within 10 working days.

Wyle Internal Audit Process Internal Auditor Responsibilities Develop, modify and/or review the audit checklist. Conduct audit according to Wyle Internal Audit Process. Record non-conformances and objective evidence. Communicate audit non-conformances to appropriate personnel and Lead Auditor.

Wyle Internal Audit Process Manager or Process Owner Responsibilities Ensure project plan or functional process is current and approved prior to the audit. Cooperate with auditors during the audit. Comply with requirements of Wyle Internal Audit Process. Perform timely corrective action. Complete Action Items in the Action Item database.

Audit Execution AUDIT GUIDES Provides a step-by-step guide for the auditor. Outlines areas for investigation. Contains references to requirements. Provides objective evidence that an audit was performed. Provides information for briefing auditee. Provides information for preparing the Final Audit Report. Provides information base for planning future audits.

Audit Execution Does the auditee know where the project plan and procedures are located? Is the process or project plan up to date? Are responsibilities appropriate? Does the information in the project plan match the SOW or other attached documents? Are appropriate records being maintained?

Audit Execution OPENING MEETING - Lead Auditor will: Provide agenda Record attendees Introduce auditors (if necessary). Explain audit purpose, scope, range. Confirm details of the audit are acceptable. Confirm status of procedures and documents. Explain how non-conformances are identified Record those present at the opening meeting

Audit Execution DURING THE AUDIT…The Audit Team will: Collect & record objective evidence Verify observations Record non-conformances Evaluate information and ensure validity

Audit Execution Corroborate facts and data. Minimize interference. Another person, preferably from another project or management level, says the same thing. Another member of the audit team hears the same thing (from the same or different source). An item, document, or record verifies the action. Minimize interference. Auditee may attempt to steer the auditor toward specific topic or interviewees. Manager may answer for or intimidate the interviewee Communication problems or conflicts between the auditor and interviewee.

Audit Execution Communicate goals. Make people feel at ease. Why is the audit being done? What are the benefits? Make people feel at ease. Auditees are our CUSTOMERS! Create a relaxed atmosphere. The auditor’s best tool is getting buy-in and cooperation. Find facts, not faults. Note the good as well as the bad. Use open-ended questioning technique..

Audit Execution Make the auditee the central figure. Build around their knowledge and expertise. Ask questions; make observations. Avoid Cross-examination. “Does that mean you never follow the procedure?” Avoid leading or “loaded” questions. “So you deliver the deliverable without anyone reviewing it?” Use the paraphrasing technique. Forces the auditor to understand intent. Gives the auditee assurance that the auditors are listening.

Audit Execution People hear what they want to hear. Think questions through. Intimidation leads NOWHERE! Provide encouragement. Positive eye-contact Positive body language Neutral wording Beware of emotional data Be aware of personalities Be aware of situations Pursue different avenues to obtain facts.

Audit Execution VERIFY OBSERVATIONS Review findings and observations. Do I have all of the facts? Do I need more evidence? Is there a clear, traceable path to documentation? Can this be a matter of interpretation? Will corrective action improve overall quality?

Audit Execution CLOSING MEETING – Lead Auditor will: Meet with appropriate managers to discuss non-conformances and any opportunities for improvement Highlight positive as well as negative Give clear evidence for non-conformances DO NOT SUGGEST CORRECTIVE ACTION! Give date for delivery of Audit Report Get tentative date for corrective action

Audit Reporting & Follow Up AUDIT REPORT – Lead Auditor will: Complete Final Audit Report, including: Non-conformances with Action Item # Opportunities for Improvement (OFI’s) Observations Positive results, process improvement successes Expression of appreciation for cooperation Distribute Final Audit Report

Audit Reporting & Follow-Up CORRECTIVE, PREVENTIVE & IMPROVEMENT ACTIONS Electronic Action Item Database Lead Auditor initiates Action Item in Database. ISO Coordinator assigns Action Item. Responsible person takes action. ISO Coordinator verifies action is complete and effective. Lead Auditor reviews area during the next audit. Unresolved issues reviewed by Senior Management.

Audit Reporting & Follow-Up MANAGEMENT REVIEW Internal Audit results and Action Items are categorized and analyzed for trends. Reviewed during Management Reviews by the Aerospace Group President and Senior Management. Senior Management assigns continual improvement Action Items.

Internal Audits – A Management Tool Wyle Audit Structure Wyle Internal Audit Process Internal Audit Execution Internal Audit Reporting & Follow up QUESTIONS?